It's true that a big crazy hullaballoo is being manufactured about AIG's bonuses, whose $165 million dollars comprise less than one tenth of one percent of the $170 BILLION. But it's also true that this is a critical fraction, because it is intended as compensation - easily exorbitant, by compensation standards - for the performance of executives who are responsible for destroying, not only their company, but the global economy.

Where was this anger when the law was being drafted? I mean, seriously, what was Congress thinking? They actually believed that they could write check after check to a profit-making enterprise and expect them to change their behavior with no strings attached.

AIG CEO Liddy claims that the company was contractually obligated to pay these bonuses since last year, and this ties his hands. While I take Glenn Greenwald's point that this is sickeningly disingenuous in light of GM's breaking of it's compensation contracts with workers, I still find the appeal of a plutocrat like Liddy to the rule of law a rather refreshing response to the whole mess.

And now, the House has passed a bill to "claw back" 90% of bonuses for any bailed out company that exceeds $250,000 per household.

But what boggles me is why Congress is so incensed to pass new legislation instead calling for actual investigation and enforcement of the laws that are already on the books. You know, things like RICO and fraud statutes. After all, if the real problem is that the compensation incentive system inside the company is not producing the desired results, isn't that what deterrent incentive systems, like criminal law, are for?

Update: Obama on Leno:

Here's the dirty little secret, though. Most of the stuff that got us into trouble was perfectly legal.

Laws? What Laws?

Oh. I see.

Comments –Nato